Question: I’m considering getting a car loan for a car I already own. I paid in full when I bought it a few years ago, because I had a lot more money then than I do now.
So I’ve been looking at websites where car loans are offered. But they all seem to require that you buy a car from a dealer to qualify for a loan, or that the loan be to pay off an existing higher-rate loan. What loan company would be best to get a loan on a car you already own?
Answer: Most banks do not offer collatoral loans on one’s own car (which is what you’re seeking). But some larger pawn shops do. And you can continue to drive it. But the downside is that you’ll only get about 50% of wholesale value with a high interest rate.
Or, you can apply for a used car loan. Then sell your car, pocketing the cash. If you take the title to your local bank (any bank), you could ask for a personal loan. If they won’t give you a personal loan, you could offer the car as collateral. Note I don’t think it would be smart to do this, but it is one way that you might accomplish what you are trying to do. I don’t think you can get a car loan, but a personal loan should be possible.About 6 years ago, my local credit union was having a big auto finance special. I was able to take my title and vehicle there and receive an auto loan. If I remember correctly, they would only loan 80% of the value since I wasn’t purchasing. Try going to a couple of bans or credit unions, and see what they have to offer.
Note that in my case, I was getting a loan on a typical family sedan (2-yr old Camry). If you are trying to get a loan on that $100k Benz to hold you over since being laid off from a high paying silicon valley job, you will likely get different results.
Also, if you have good credit, keep in mind that you are doing the lender a favor by giving him business. He is not doing you a favor by giving you a loan. I have had this attitude every time I have applied for a loan at a bank, and always been able to negotiate down the rate, fees, etc.
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